I use an iPod touch to watch videos... But most of my videos are not ipod video format... i searched for video converters.. but the most easiest to use was iTransPod.. tu can also clip a part of the movie...
iTransPod is a perfect companion for iTunes. It lets tu import movies, clips, música videos to your iPhone, iPod Classic, Nano & Touch. This plug-in appears inside iTunes and is extremely simple to use (Watch demo!). It can understand even the most cryptic video formats and codecs around (AVM, ASF, WMV, AVS, FLV, MKV, MOV, AVI, 3GP, M4V, MP4, MPG, MPEG, DAT, OGM, VOB, RM, RMVB, TS, TP, IFO, NSV).
tu can download it here.. link
it also has how-to-use video..